Sallie Mae is introducing a new service for colleges and universities aimed at streamlining the tuition and financial aid refund process that also provides no-fee checking and debit accounts for students.

The new offering from Sallie Mae is designed to help ease the burden on colleges and universities that each year face tight deadlines for paying out refunds to thousands of students who receive financial or tuition aid.

"With the new Sallie Mae No-Fee Student Checking account with Debit MasterCard, schools can disburse financial aid and tuition refunds to students the same day," according to a Sallie Mae press release.

This quick turn-around-time for refunds is noteworthy, given new mandates for higher education institutions that go into effect this summer. By outsourcing refund disbursements to Sallie Mae, schools may be better equipped to comply with new Title IV regulations which, beginning in July, will require certain refunds to be made within seven days, half the prior standard time allowed, says a CR80News report.

"Sallie Mae has been helping colleges and universities focus on educating students rather than processing payments for more than a decade," Kelly Christiano, who leads the Campus Solutions and Savings businesses at Sallie Mae, said the press release. "Our state-of-the-art technology and 40 years of experience enables us to be the lowest cost provider in the market helping schools improve efficiency and saving students money."

The No-Fee Student Checking account and refund disbursement plans will be added to this line of higher education financial services as Sallie Mae will be trying to snatch some market share from Higher One, which specializes in financial services for students with financial aid refunds, according to Inside Higher Ed.

Kelly Field of The Chronicle of Higher Education said competition between Sallie Mae and Higher One is bound to heat up, because in June, Sallie Mae will offer a checking account with lower fees than Higher One's.

The student-loan industry giant also owns Upromise, based in Newton, Mass., The Boston Globe noted, which has specifically designed a rewards program for consumers interested in contributing to a college savings account or paying off a student loan. Consumers who sign up to become Upromise members earn cash toward those accounts when they make purchases at participating retailers.

Last year, Sallie Mae supported $8 billion in transactions at over 1,000 schools, according to the company.

Compiled by CityTownInfo.com Staff

Sources:

"Colleges and Universities Now Have More Efficient, Lower-Cost and Student-Friendly Options to Manage Tuition Funds," businesswire.com; March 21, 2011